Month: November 2014

While Bernie Madoff’s tentacles did not extend to St. Louis, we did see St. Louis brokers sent to jail for stealing client money. Madoff’s victims included sophisticated investors, foundations, investment firms and even universities. The cases involved brokers employed by some of the most respected brokerage houses in St. Louis. How can you protect yourself? Read more about IS MY BROKER RELATED TO BERNIE MADOFF?[…]

A recent tax scheme of a tax attorney in league with financial advisors and accountants has hurt several score of small businessmen in St. Louis. The scheme was promoted nationwide by a handful of tax attorneys in league with financial advisors. The Scheme The tax shelter was called a PIRAC (Private IRA Corporation). In its simple Read more about A FRAUDULENT TAX SHELTER – INVESTORS AVOID THIS SCAM![…]

At least once a week, I get a fancy looking invitation for a free dinner. The sponsor usually paints himself as a ‘retirement specialist.” He may say he is endorsed by a religious organization. The invitation may include a free seminar on retirement planning. If you are a recipient of one of these invitations, you Read more about WHEN A ‘RETIREMENT SPECIALIST’ OFFERS A FREE DINNER – RUN![…]

A variable annuity is an insurance product sold for investment purposes. The insurance element is the death benefit which is payable only if you die at the time the variable annuity is still in effect. To receive the death benefit you have to die- an event many investors do not appreciate! The investment element is Read more about 5 REASONS WHY YOU SHOULD BE WARY OF VARIABLE ANNUITIES[…]

Let me first set the stage and describe how securities arbitration has evolved. In 1987 the Supreme Court ruled that customary brokerage customer agreements calling for arbitration of customer disputes were enforceable. As a result most customer disputes went to the NASD (National Association of Securities Dealers). Accordingly, if you have a dispute with your Read more about ARE FINRA ARBITRATION PANELS FAIR?[…]

No. But since I have your attention, “selling away” is one of the most pernicious and dangerous investment scams in the brokerage industry. It is outlawed by FINRA and all state security regulators, yet it persists. First, let me explain “selling away” (the phrase used by the industry and regulators – not me). “Selling away” Read more about IS SELLING AWAY THE SAME AS AN AFTER CHRISTMAS SALE?[…]

Confidentiality clauses in securities arbitration settlement agreements are normally requested by brokerage houses and agreed to by claimants as a condition of settlement of a securities arbitration dispute. Claimants are prohibited from disclosing anything regarding the settlement, particularly the facts underlying the arbitration and the amount of money being paid. This may seem to be Read more about CONFIDENTIALITY CLAUSE: A SETTLING CONDITION IN SECURITIES ARBITRATION[…]

A previous article by Jack Waymire, What are my Costs when Financial Advisors Buy & Sell Securities? discussed how advisory fees impacted activity in a managed account. He also touched on certain accounts that he characterized as churning. In a purely legal sense, churning is excessive buying and selling for the purpose of generating commissions for the Read more about MARGIN ACCOUNTS – ANOTHER FORM OF CHURNING[…]

The history of securities arbitration, a creation of the brokerage industry, is also a story of unintended consequences. One of those unintended consequences is known as the Suitability Rule, the cornerstone of customer consumer protection in securities arbitration. The story began in the 1930′s when, following the Great Depression, Congress passed the Securities and Exchange Read more about FINRA’S SUITABILITY RULE AND UNINTENDED CONSEQUENCES[…]

The assumption that bonds are a uniformly “safe” investment is not always true. Some bonds are unrated and must be evaluated by your financial advisor and broker. Many unrated bonds are underwritten by brokerage houses and sold to their customers. Typically the prospectus is complex, lengthy, and presented in dense legalese. Only your stock broker Read more about IS INVESTING IN BONDS A SAFE INVESTMENT?[…]

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